44.In a ledger, debit entries cause:
A. Increases in owners' equity, decreases in liabilities, and increases in assets.
B. Decreases in liabilities, increases in assets, and decreases in owners' equity.
C. Decreases in assets, decreases in liabilities, and increases in owners' equity.
D. Decreases in assets, increases in liabilities, and increases in owners' equity.
45.Which of the following accounts normally has a credit balance?
A. Cash.
B. Service revenue.
C. Accounts receivable.
D. Utilities expense.
46.Which of the following accounts normally contain a debit balance?
A. Asset.
B. Liability.
C. Owners' equity.
D. Revenue.
47.Sue Costa, owner of A-1 Cleaning Services, invested an additional $75,000 in the company. Which of the following would be a part of the correct journal entry to record this transaction?
A. A debit to the Cash account.
B. A debit to the Equity account.
C. A debit to the Capital Stock account.
D. A debit to the Cash Received account.
48.If a company purchases equipment on account:
A. Assets will increase and owners' equity will also increase.
B. Assets will increase and owners' equity will decrease.
C. Assets will increase and owners' equity will remain unchanged.
D. Assets will increase and liabilities will decrease.
49.The journal entry to record a particular business transaction includes a credit to a liability account. This transaction is most likely also to include:
A. Issuance of new capital stock.
B. The purchase of an asset on account.
C. A cash payment.
D. A credit to Accounts Receivable.
50.The journal entry to record a particular business transaction includes a credit to the Cash account. This transaction is most likely also to include:
A. Issuance of new capital stock.
B. The purchase of an asset on account.
C. Payment of an outstanding note payable.
D. A credit to Accounts Receivable.
51.The collection of an account receivable is recorded by a debit to Cash and a credit to Accounts Payable. If this error is not corrected:
A. Total liabilities are understated.
B. Total assets are understated.
C. Total liabilities are overstated.
D. Owners' equity is overstated.
52.If a company purchases equipment for cash:
A. Assets will increase and owners' equity will also increase.
B. Assets will increase and owners' equity will decrease.
C. Assets will increase and owners' equity will remain unchanged.
D. Total assets and owners' equity will remain unchanged.
53.Collection of an accounts receivable:
A. Increases the total assets of a company.
B. Decreases the total assets of a company.
C. Does not change the total assets of a company.
D. Reduces a company's total liabilities.